Question 1

You cannot benefit from capital appreciation until you actually sell your stock.

Accepted Answer

A) True 
 B)False

Question 2

A SWOT analysis

Accepted Answer

A) is a good way of breaking down a firm's capabilities and gaining a better understanding of what the future may hold for the firm. 
B) focuses on strengths,weaknesses,opportunities,and threats. 
C) is designed to better understand a firm's strategies and whether or not the strategies are sustainable. 
D) All of the above 
A) is a good way of breaking down a firm's capabilities and gaining a better understanding of what the future may hold for the firm. 
B) focuses on strengths,weaknesses,opportunities,and threats. 
C) is designed to better understand a firm's strategies and whether or not the strategies are sustainable. 
D) All of the above

Question 3

Which of the following investment options is not affected by a change in the market rates of interest?

Accepted Answer

A) Common stocks 
B) Corporate bonds 
C) Government bonds 
D) None of the above is correct;all are affected. 
A) Common stocks 
B) Corporate bonds 
C) Government bonds 
D) None of the above is correct;all are affected.

Question 4

Income stocks are stocks that have a very high capital appreciation potential.

Accepted Answer

A) True 
 B)False

Question 5

When all stocks move in the same direction,diversification among stocks works just as well as ever.

Accepted Answer

A) True 
 B)False

Question 6

Returns from shares of stock come in the form of

Accepted Answer

A) stock splits. 
B) capital appreciation. 
C) dividends. 
D) All of the above are correct. 
E) Only B and C are correct. 
A) stock splits. 
B) capital appreciation. 
C) dividends. 
D) All of the above are correct. 
E) Only B and C are correct.

Question 7

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

Accepted Answer

A) True 
 B)False

Question 8

The experts say that a person under the age of 40 should have a majority of their retirement money invested in the stock markets.What is the reason for this?

Accepted Answer

A) On average,common stocks provide a higher return on investment than other investment options. 
B) Younger people have enough time ahead of them to ride out any dramatic market movements. 
C) Younger people generally don't have enough money to invest in other options. 
D) All of the above are correct. 
E) Only A and B are correct. 
A) On average,common stocks provide a higher return on investment than other investment options. 
B) Younger people have enough time ahead of them to ride out any dramatic market movements. 
C) Younger people generally don't have enough money to invest in other options. 
D) All of the above are correct. 
E) Only A and B are correct.

Question 9

When a corporation engages in a stock repurchase,each remaining shareholder owns a smaller proportion of the firm.

Accepted Answer

A) True 
 B)False

Question 10

Some firms have negative earnings per share numbers.

Accepted Answer

A) True 
 B)False

Question 11

Amazon is an example of a company whose common stock is considered to be a growth stock.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following questions should potential investors answer before investing?

Accepted Answer

A) Is this a good price for the stock? 
B) Is this firm in a position that will allow profitability in the future? 
C) Are this firm's strengths and weaknesses likely to get better or worse? 
D) Are this firm's threats and opportunities likely to get better or worse? 
E) All of the above 
A) Is this a good price for the stock? 
B) Is this firm in a position that will allow profitability in the future? 
C) Are this firm's strengths and weaknesses likely to get better or worse? 
D) Are this firm's threats and opportunities likely to get better or worse? 
E) All of the above

Question 13

You are considering the purchase of a stock with a current market price of $50.25 per share.It is expected to pay a dividend of $5.25 next year.Historically the stock has grown at 5%,and based on its risk,you desire to earn a 15% return.Which of the following is true?

Accepted Answer

A) Buy the stock,since your estimated price is higher than the market price. 
B) Buy the stock,since your estimated price is lower than the market price. 
C) Do not buy the stock,since your estimated price is lower than the market price. 
D) Do not buy the stock,since your estimated price is higher than the market price. 
E) None of the above are true statements 
A) Buy the stock,since your estimated price is higher than the market price. 
B) Buy the stock,since your estimated price is lower than the market price. 
C) Do not buy the stock,since your estimated price is lower than the market price. 
D) Do not buy the stock,since your estimated price is higher than the market price. 
E) None of the above are true statements

Question 14

This approach is used regularly by security analysts to measure a stock's relative value,or how much investors are willing to pay for a dollar of the company's earnings.It is found by dividing the price per share by the earnings per share and is called the

Accepted Answer

A) P/E ratio. 
B) technical industry analysis. 
C) fundamental analysis. 
D) discounted dividends valuation. 
E) market-to-price ratio. 
A) P/E ratio. 
B) technical industry analysis. 
C) fundamental analysis. 
D) discounted dividends valuation. 
E) market-to-price ratio.

Question 15

In the short run,market variability or volatility creates potential risk.

Accepted Answer

A) True 
 B)False

Question 16

Differentiate between the general classifications of common stock.

Accepted Answer

Blue-chip stocks are issued by large,nat

Question 17

The stocks tracked by the Dow represent over 50% of the market value of the NYSE.

Accepted Answer

A) True 
 B)False

Question 18

The Dow Jones Industrial Average is based on the movement of 500 stocks,primarily from the NYSE.

Accepted Answer

A) True 
 B)False

Question 19

The S&P 500

Accepted Answer

A) is the oldest and most widely quoted of the stock indexes. 
B) is a narrower index than the DOW. 
C) includes some stocks from the OTC market. 
D) all of the above 
A) is the oldest and most widely quoted of the stock indexes. 
B) is a narrower index than the DOW. 
C) includes some stocks from the OTC market. 
D) all of the above

Question 20

Your mother-in-law's stockbroker focuses on supply and demand,and uses charts and computer programs to identify and make buy-sell recommendations.She is using the ________ method.

Accepted Answer

A) descriptive analysis 
B) visual hedging 
C) technical analysis 
D) push and shove 
E) none of the above 
A) descriptive analysis 
B) visual hedging 
C) technical analysis 
D) push and shove 
E) none of the above

You cannot benefit from capital appreciation until you actually sell your stock.

A SWOT analysis

Which of the following investment options is not affected by a change in the market rates of interest?

Income stocks are stocks that have a very high capital appreciation potential.

When all stocks move in the same direction,diversification among stocks works just as well as ever.

Returns from shares of stock come in the form of

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

The experts say that a person under the age of 40 should have a majority of their retirement money invested in the stock markets.What is the reason for this?

When a corporation engages in a stock repurchase,each remaining shareholder owns a smaller proportion of the firm.

Some firms have negative earnings per share numbers.

Amazon is an example of a company whose common stock is considered to be a growth stock.

Which of the following questions should potential investors answer before investing?

You are considering the purchase of a stock with a current market price of $50.25 per share.It is expected to pay a dividend of $5.25 next year.Historically the stock has grown at 5%,and based on its risk,you desire to earn a 15% return.Which of the following is true?

This approach is used regularly by security analysts to measure a stock's relative value,or how much investors are willing to pay for a dollar of the company's earnings.It is found by dividing the price per share by the earnings per share and is called the

In the short run,market variability or volatility creates potential risk.

Differentiate between the general classifications of common stock.

The stocks tracked by the Dow represent over 50% of the market value of the NYSE.

The Dow Jones Industrial Average is based on the movement of 500 stocks,primarily from the NYSE.

The S&P 500

Your mother-in-law's stockbroker focuses on supply and demand,and uses charts and computer programs to identify and make buy-sell recommendations.She is using the ________ method.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 12: Investing in Stocks

You cannot benefit from capital appreciation until you actually sell your stock.

A SWOT analysis

Which of the following investment options is not affected by a change in the market rates of interest?

Income stocks are stocks that have a very high capital appreciation potential.

When all stocks move in the same direction,diversification among stocks works just as well as ever.

Returns from shares of stock come in the form of

The dividend yield tells investors how much in the way of a return they would receive if the stock price and the dividend level remain constant.

The experts say that a person under the age of 40 should have a majority of their retirement money invested in the stock markets.What is the reason for this?

When a corporation engages in a stock repurchase,each remaining shareholder owns a smaller proportion of the firm.

Some firms have negative earnings per share numbers.

Amazon is an example of a company whose common stock is considered to be a growth stock.

Which of the following questions should potential investors answer before investing?

You are considering the purchase of a stock with a current market price of $50.25 per share.It is expected to pay a dividend of $5.25 next year.Historically the stock has grown at 5%,and based on its risk,you desire to earn a 15% return.Which of the following is true?

This approach is used regularly by security analysts to measure a stock's relative value,or how much investors are willing to pay for a dollar of the company's earnings.It is found by dividing the price per share by the earnings per share and is called the

In the short run,market variability or volatility creates potential risk.

Differentiate between the general classifications of common stock.

The stocks tracked by the Dow represent over 50% of the market value of the NYSE.

The Dow Jones Industrial Average is based on the movement of 500 stocks,primarily from the NYSE.

The S&P 500

Your mother-in-law's stockbroker focuses on supply and demand,and uses charts and computer programs to identify and make buy-sell recommendations.She is using the ________ method.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters